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Government Auction for Confiscated Real Estate Properties

The Mexican government held an auction on June 23rd for 27 real estate properties that had been confiscated by the government, primarily properties previously held by narco-trafficers.

The 27 parcels were located in 11 states, while 10 were located in México state alone. All were confiscated by the Attorney General’s Office (FGR) or federal courts. The total starting price of the properties is about 176.5 million pesos (US $9.2 million). One property was a house in Cancún (shown in picture) valued at 9.7 million pesos. Another property was part of the Centenario Ranch in Jilotepec, México state, which was confiscated after police found a methamphetamine laboratory there in 2011.

One can’t help but think that people would be a little hesitant to participate in such an auction. For at some point in time the previous owner will get out of jail and just might want the property back, no matter what you, or the may government have to say about the matter. They tend to play by their own rules, as we are all too aware.

Previously reported in the Mexico Daily News.

Buying Real Estate in Mexico

Puerto Vallarta Real Estate 101

It is a common misconception that foreigners cannot own real estate in Mexico, but the reality is that they can. Buying real estate in Mexico is perfectly legal for a foreigner or foreign corporation to acquire any type of real estate, holding the property as a direct owner, with the exception of properties located in the Restricted Zone.

The Mexican Constitution regulates the ownership of land and establishes that “… in a zone of 100 kilometers along the border or 50 kilometers along the coast, a foreigner cannot acquire direct ownership of the land”. These areas are known as the “Restricted Zones” or “Prohibited Zones”.

Nevertheless, the latest Mexican Foreign Investment Law, enacted December 28, 1993, provides a solution. Within the Restricted Zone, a foreigner or foreign corporation can obtain all the rights of ownership with a bank trust, known as a Fideicomiso.

The “Fideicomiso” Trust

Any foreigner or Mexican National can establish a Fideicomiso (the equivalent of an American beneficial trust) through a Mexican bank to purchase real estate anywhere in Mexico, including the Restricted Zone. For practical reasons, even in unrestricted zones, many foreigners and Mexican nationals prefer to hold their property under a Fideicomiso.

To do so, the buyer requests a Mexican bank of his choice to act as a trustee on his behalf. The bank, as a matter of normal course, obtains the permit from the Ministry of Foreign Affairs to acquire the chosen property in trust.

The Fideicomiso can be established for a maximum term of 50 years and can be automatically renewed for another 50-year period. During these periods you have the right to transfer the title to any other party, including a member of your family.The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary, who has all the benefits of a direct owner, including the possibility of leasing or transferring his rights to the property to a third party.

The trustee is responsible to the buyer/beneficiary to ensure precise fulfillment of the trust, according to Mexican law, assuming full technical, legal and administrative supervision in order to protect the interests of the buyer/beneficiary. Fideicomisos are not held by the trustee as an asset of the bank.

Another alternative is to purchase non-residential property through a Mexican corporation, which under certain conditions can be 100% foreign-owned, with a provision in its by-laws that the foreigners accept being subject to Mexican laws and agree not to invoke the laws of their own country. Also, they agree that the real estate acquired be registered with the Foreign Affairs Ministry and be used for non-residential activities. In other words, under these conditions foreigners can directly acquire properties destined for tourist, commercial and industrial use.

The Real Estate Industry

The real estate industry in Mexico is similar in many ways to that of the United States, which is probably the most advanced in the world. It is developing quickly, taking advantage of today’s technology; however, it seems to be paralleling the system as it exists in the US.

Licensing

The Associación Mexicana de Profesionales Inmobiliarios (Mexican Association of Real Estate Professionals), or AMPI, is a reputable national professional real estate organization with many chapters throughout Mexico. This organization is similar to the National Association of Realtors (NAR) in the US, and in fact has a joint venture with the NAR, such that AMPI membership automatically confers membership in the NAR, as well. In the Vallarta area, there are three AMPI chapters, AMPI Vallarta, AMPI Riviera Nayarita and AMPI Compostela. At this time, there are no government license laws regulating real estate brokerage and sales in Mexico. Anybody can, in effect, offer properties for sale. Therefore, caution should be taken to select an established and reputable real estate company. A potential buyer may want to have a look at www.mlsvallarta.com, which lists most of the real estate agencies in the region, as well as providing access the Multiple Listing Service (MLS).

Financing

Historically, due to lack of capital markets and high Mexican interest rates, most transactions were made in cash. That is changing rapidly, however, and many local and foreign banks are now offering financing options. Loan terms can vary significantly, so it pays to shop around a bit. There are a few mortgage brokers in Puerto Vallarta who can explain in full the terms and conditions, and pre-approve you to determine how much financing you could obtain.

Multiple Listing Service (MLS)

MLSVallarta has been providing MLS service to real estate agencies, developers and the public since 1989. It was the first and is currently the longest running MLS in Mexico. As well, the real estate association, AMPI, has an MLS service that’s available at www.vallartanayaritmls.com.

Escrow, Title Insurance and Home Insurance

It is recommended to use an escrow account for real estate transactions. There are a few companies available that provide this service. They also offer title insurance, which is relatively new to Mexico. Many insurance companies provide full home coverage. Your broker can recommend some good options.

Purchase-Sale

Most real estate transactions are “opened” after a written purchase offer is accepted by the seller and when a purchase-sale agreement (promissory contract) is signed by both parties. A deposit is required by the broker to transmit the offer to the seller. (If the transaction is being conducted directly with the seller, it is highly recommended that a real estate broker or lawyer be consulted before signing any papers or handing over any money). It is common practice to deliver to the seller, as an advance payment, the equivalent of 10-30% (including the initial deposit) of the total price upon signing the purchase-sale agreement, which should contain a penalty clause applicable in case there is a breach of contract by any of the parties. Normally, when signing the escritura (the official deed, which needs to be certified by a Public Notary) the balance is paid and the property is delivered. This should not take more than 45 days. It is recommended that an escrow account be used for all real estate transactions.

The Notary Public

A Public Notary is a government-appointed lawyer who processes and certifies all real estate transactions, including the drawing and review of all real estate closing documents, thus ensuring their proper transfer. Furthermore, all powers of attorney, the formation of corporations, wills, official witnessing, etc. are handled and duly registered through the office of the Public Notary, who is responsible to the government for the collection of all taxes involved. In connection with real estate transactions, the Public Notary, upon request, receives the following official documents, which are required by law for any transfer:

A non-lien certificate from the public property registry, based on a complete title search;
A statement from the treasury or municipality regarding property assessments, water bills and other pertinent taxes that might be due;
An appraisal of the property for tax purposes.

Closing Costs

It is common practice that the buyer pays the transfer of acquisition tax and all other closing costs, including the Notary’s fees and expenses, while the seller pays his capital gains tax and the broker’s commission.

Previously, the real estate transfer tax was 2% nationally. But in 1996, the law changed, giving individual states the right to set this tax level. The range now varies from 1-4% of the tax appraisal value, which is generally less than the sales value.

The rest of the closing costs, which exclude the transfer cost mentioned above, vary from 3-5% or more of the appraised tax value, depending on the particular state. These percentages are applied to the highest value of the following:

The amount for which the property is sold
The value of the official tax appraisal
The value designated by the property assessment authorities

Cost of the Fideicomiso

Based on the present tariff, the bank charges the person desiring the Fideicomiso an initial fee ($400-500 USD) for drawing up the agreement and establishing the trust, plus a percentage based on the value of the property. In addition, the bank charges an annual fee to cover its services as a trustee.

Real Estate Broker’s Commission

Real estate companies charge a commission (plus tax), calculated on the sale price of the property, which usually runs between 6-8%.

Capital Gains Tax

The laws regarding capital gains taxes in Mexico seem to change every year. To obtain the latest information available, check out this article by local Mexican lawyer David Connell, who keeps it regularly up-to-date.

MLS Plugin

Welcome to the instructional video for installing the MLS inventory on your website.
Installing and activating the MLSVallarta WordPress plugin is easy – just follow these simple steps. If you know how to access the back end of WordPress to make changes to your website, you can do this by yourself. If not, have your web developer do it for you.

First you’ll need to go to MLSVallarta.com to download the plugin. Log into the members area by clicking on “Member’s Access” found at the top of the home page. Use your username and password to sign in. If you’ve forgot this information, please contact our office and we’ll assist you. Once inside, you’ll see on the left navigation column the title “Downloads.” Click on it. Here, under “Plug-ins” on the right, you’ll find a link that will allow you to download the plugin in a .zip file format to your computer desktop. Download it by clicking on it but don’t forget the location where you saved it as you’ll be needing it later.

Now, open up WordPress and access your website’s administrative backend. You may want to just open another tab in your browser as you will be returning to MLSVallarta.com later on. On the menu navigation on the left, look for “Plugins” and click on it. Your screen may not look exactly like this one does, but Plugins should be listed there.

Once inside the Plugins, click on “Add New”
Locate the “Upload” option and click on it. A prompt will appear on the screen asking you to locate the .zip file you downloaded earlier. Find it and select it. By default, this file’s name is “MLS-Vallarta-Wordpress.zip”. Then click on “Install Now”
Once the installation process is finished finished, click on the “Activate Plugin” option.
The next step is to connect your MLSVallarta account with your website. To do this, go back to the MLSVallarta member’s area. Once in the member’s area, go to your profile and look for the green button that reads “View API Keys”. Click on this button and a small window will appear with two long strings of numbers and letters – these are your keys. Copy the “Access Key” and then go back to your website’s WordPress administrator and click on the “MLSVallarta” menu option which should now appear on the left side of your screen.
Paste your first key into the “Access Key” field, and repeat the process with your “Secret Key”. Then click on the “Add” button.

You may see another screen with an option to add your Google Maps API key. This is not necessary to complete the configuration, but it is strongly recommended that you do this step. If you don’t know how to do this, you’ll find information about it on our website under support, found on the footer of any page. Finish by selecting your office on the drop-down menu.

On the next menu you’ll be asked to select the color you want the plug-in to show in. Select a color that is closest to the main color of your website and click on save.

And that’s it. The plugin will create a page for you in your website. If you want to have it elsewhere, you can create a widget for this. If you feel confident in doing this yourself, you can add it to the sidebar of your site, or you can ask your developer to prepare a custom widget area so the MLSVallarta search appears where you want it to appear.

That should do it! Now your visitors can use the MLSVallarta’s search feature and view all the MLSVallarta properties directly on your site. Any inquiries they make will go to your email address.

CMA

Create a new report

If you want to create a more in depth report for a client that is interested in buying or selling a home, this report includes a covering letter and more information and photos about each of the properties you’ve gathered, more than you’d get using the regular search function.

To create the report, in the administrative area of MLS click on “Comps (CMA)”. When this page opens, if you’ve done reports before, they will be listed and archived here for you.

Begin a new CMA by clicking on “New Report”. If this is for a prospective buyer, select “Buyer”. If it is for a prospective seller, click on “Seller”, and then “Create Report”. We’ll start with a report for a seller.

It’s mandatory to give the report a name, such as the name of the property or owner. You can add additional information about the client, but it is not mandatory at this stage and you can alway add to this later.

So add a title and click on “Next”.

Now you need to describe the property you are creating the CMA for. Most important to fill in are type, size and number of bedrooms. Next fill in the address and where it is located, which region. Then click on Next.

Now you can start gathering properties for your CMA. You’ll see in the search that the fields type, region and sub-region have already been filled in.

It is set up to first search for current similar listings in the MLS inventory. To narrow your search down, you should put an estimated price range. We’ll search between 300,000 and 500,000 and then click on “Search”.

The properties that fit this search will be listed below. You can review them, comparing price, size and number of bedrooms, and then add them to your CMA list by clicking on the box field on the right where they’ll automatically be added to your report. You won’t see them at this stage, but be assured they’ve been added.

Next we’ll search for solds. To do this go up and click on the “Solds” button. You’ll want to limit the search to not going back too far in time. If you click on Advanced Search you’ll see that the default is set for one year. We’ll try that first and select a few properties that we believe to be similar to the subject property.

Current listings show the prospective seller what their current competition is. Solds show what people were willing to pay for a property like theirs. Expired often can show what people weren’t willing to pay, so the listing expired, staying unsold. We’ll search for them next.

Click on “Expired” and then the Search button, and then choose properties that you believe to be similar.

Now we can generate the report by clicking on this button at the top right side of the page.

You’ll see in the middle of the report, if you’ve added enough properties, that it provides an average of what the subject property’s price should be considered, compared against current, sold and expired listings, based on its size. This is just a guide, though, you select the price that you believe is best.

Below this are listed all the properties you’ve selected. If you want to remove any, just click on the “X” on the right side. If you want to add more properties, click on the Add/Edit button at the top of the page to return to the search page.

Once done, fill in the suggested price that you recommend for the property, and any notes that you want to go with the report, and then click on “Save” to save your report.

At this point you may want to edit or add the information on your title page. To do so click on the dotted drop-down menu next to “Print Report” button at the top of the page on the right.

While here you’ll notice that you can add non-MLS sold or current listings to the CMA. If you know of properties that may not be in MLSVallarta, but are good comparables, you can add them to the system and they will be available for you to add to this report, and any report anyone in your office generates in the future.

To add a non-mls property, simply select this function. A new page will open and you can fill in information about this property. Fill it all in and select “submit”. It is important to understand than no one will see this property other than you and other people in your office.

You’ll be taken back to your report and you’ll see that this property has been added to your CMA, showing with an asterisk beside it.

When done, click on “print report” to see how the report looks, with your contact information on it, and information about the collected properties. It will be downloaded in PDF format to your downloads folder. If you want to make changes you can return and do so, or, the report is ready to go.

Commonly Asked Questions about Puerto Vallarta Real Estate

Below are some of the more commonly asked questions regarding the buying process for real estate in Mexico.

Can I actually own land in Mexico?

Yes. Although the restricted zone specified in the Mexican Constitution prohibits a foreigner from acquiring direct ownership of land within 100 kilometers along the border or 50 kilometers along the coast, you can obtain all the rights of ownership in the restricted zone via a bank trust known as a “Fideicomiso”. Since Vallarta lies within this zone, you need to use a trust here if you are not Mexican, but for all intents and purposes, it’s just like getting title.

What is a “Fideicomiso Trust”?

Because of the restriction mentioned above, a buyer can request a Mexican bank of his choice to act as a trustee on his behalf. The fideicomiso (trust) can be established for a maximum term of 50 years and can be automatically renewed for another 50-year period. The title is transferable to any other party. The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary, who has all the benefits of a direct owner. For more information read this article.

What is the MLS system in Vallarta?

There are two primary systems in the region providing MLS service. MLSVallarta was the first and is currently the longest running MLS in Mexico, combining properties for sale by both individual homeowners and real estate developers. The real estate association AMPI also has an MLS system, called Flex, which can be viewed at www.vallartanayaritmls.com.

What is MLSVallarta and what are its services?

MLSVallarta was started and for many years it was the official MLS for the local real estate associations. Today, it is independent and strives to assist people who are interested in real estate in the Puerto Vallarta / Riviera Nayarit region. MLSVallarta does not sell real estate, it is simply an objective intermediary, striving to make the process of obtaining information about the real estate market and what currently is for sale, as simple, informative and easy as possible.

Should I be working with a real estate agent?

Yes, you should, whether you are buying or selling. The process is not as simple or straightforward as it is in the USA and Canada and there are potential obstacles that a guide can help you navigate through (unless you speak Spanish, you’re at an immediate disadvantage). They also have access to marketing tools, such as the MLS, that allows more extensive searching, that sellers are not privy to. Here’s an article that explains more.

Is there a RE association and are realtors licensed?

AMPI, the Mexican real estate association, has three chapters in Puerto Vallarta that provide traditional real estate services and also ensure that realtors are behaving according to the highest professional standards. There is no mandatory licensing currently for realtors in Mexico; however, in Puerto Vallarta AMPI has stepped in to fulfill a similar role as best they can. More information regarding the local real estate association can be found at www.vallartanayaritmls.com.

So how do I find out what’s for sale in Vallarta and Riviera Nayarit?
They are a number of ways you can go about this.

Work with a real estate agent. Find one you are comfortable with who can help explain what the different popular regions are and what they have to offer, what type of real estate is available and walk you through the purchase process. There’s a list of agencies featured here.
Do your homework. Get to know the different regions around the bay. Each community is quite unique. Spend some time to review the areas features under Regions. Be sure to also check out the regions section as well inside the Map Search function –here you can visually see each region, sub-region and obtain information about each one. You’ll want to be familiar with the regions and sub-regions before you start using the MLS Search.
Review the Resources section, where there is a large collection of articles about real estate in Vallarta.
Start using MLS Map Search. It offers plenty of information on properties that are currently for sale in Vallarta and Nayarit. There is also a “Quick Search” that is very easy to use and can take of most of your needs. You will also find a wealth of information about real estate projects under the “Developments” tab, with descriptions, images, pricing and current inventory.

What type of real estate will suit our needs?

There are a number of different types of vacation real estate, beginning with timeshare, then fractional and full-time ownership. With these, any of them could be a condominium, apartment, townhouse or a single family dwelling. What works best for you depends where you are in your life and what your current finances will allow. You can always more up or down, as your needs change, into something that would work better for you. Check out this article for more information about property types.

What Community would best suit our needs?

Vallarta and Nayarit offer myriad of options when it comes to where you may eventually choose to live. You can be on the beach, in the mountains, along a golf course or in a marina. You can be right in downtown Vallarta or one of the small towns situated further out. For more information regarding community options, visit this article about popular neighborhoods and communities around Banderas Bay.

What are the closing costs and how much do they usually entail?

Whenever a real estate purchase takes place in Mexico, a number of additional closing costs are involved and should be taken into account. These can vary in amount and complexity, depending on the type of transaction and whether a trust is involved, and are determined by the notary office of your choice, along with the real estate agency handling the transaction.

How much are property taxes and other regular home expenses?

Property taxes are low compared to the USA and Canada; however, condos charge additional fees, such as homeowners’ association and master homeowners’ association charges. Utilities are reasonably priced, and household staff, such as maid, chef and butler, is extremely affordable.

Is financing available?

Yes. This process is easier than ever, and interest rates are lower than in the past. Many banks currently have English-speaking divisions, and many realtors are bilingual. Established realtors often have their own mortgage broker who can pre-qualify purchasers. If you will be needing financing, it is recommended that you contact a mortgage broker to better understand the financing available and how much you would qualify for.

What are the advantages and disadvantages of condo living?

Advantages:

When it’s time to leave, you simply lock the door, making it more secure than a private home.
Sharing maintenance costs with the other residents lowers monthly expenses. Condos often offer a better view if you live on a higher floor.
Because 80 percent of the product inventory in Vallarta is condos, there are properties available at all price points, with a wide variety of locations and styles to choose from.

Disadvantages:

Sharing your costs means living in close proximity to others.
Decisions about the property are made by group majority and may not reflect your preference.
Homeowners’ association meetings can be challenging, particularly for those who’ve never lived in a condo.
This article provides additional information regarding the pros and cons of condo living.

What is the role of the homeowners’ association (HOA)?

The HOA is responsible for maintaining and administering the common areas of any project or development. They collect maintenance fees from the owners, provide reserve funds, pay the bills and work with a board made up of homeowners. A well-run association can keep your costs down, but it’s a good idea to find out how it’s functioning in any property you may be interested in. This is something that is too often overlooked when prospective purchasers are considering a property.

What are the advantages of buying pre-sale vs. re-sale?

When purchasing a re-sale property, you know exactly what you’re getting; however, if it’s an older home or condo, it may require maintenance or upgrading or may be missing the stylish amenities a new unit may offer. Pre-sale purchases often involve purchasing over floor plans, models and artist renditions, which may leave some aspects up for contention later. Sometimes, though, it turns out even better than the buyer expected, but not always! Also, in challenging economic times, a developer may cut back on quality of finishing, in order to save money. But with a pre-sale property, you get the advantages of sometimes better pricing and stylish, new amenities. And it’s new, so serious maintenance should not be needed for some time. More information regarding buying pre-sale, from a lawyer’s perspective, is available here.

Member Profile Page

Member’s area profile page

In the administrative area, or the “back-end” of MLSVallarta, you’ll find a link called “My Profile”. Here, you can provide personal information about yourself that will be used to provide contact information for your listings.

Profile Information

Be sure to accurately fill in your name and contact information on the right, and then upload a photo of yourself by clicking on the “Upload New Picture” where you’ll then be asked to identify where the photo is kept. When selected, click on choose and the photo will be uploaded, cropped and should appear after a few seconds on the page.

Membership Affiliations

If you have any membership affiliations, click on the appropriate ones, and also add any media accounts you may have.

Notifications

You can control here which notifications you’d like to receive by email from other members. The Hot Sheet is mailed out regularly by MLS to let you know what new listings have been added to the system, or changes have been made. Promotion is used when you want to receive notices from other members about new property listings or price changes. If you are involved in rentals you may want to select it to receive information regarding rentals from other members. Click on Open Houses if you want to receive notices about such upcoming such, and select Buyer’s Requests if you want to receive notifications from other members about what their clients are be looking for and what perhaps you may have.

Save Changes

Under this is Bio. These are fields that are currently not being used by the system so you can ignore them for now. When done, click on the “Save Changes” button and all your changes will be saved.

Search

Using the search function in the Member’s Area

You can use the public-side of MLSVallarta to search for properties, but you’ll find you’ll have more options and flexibility if you use the Search function in the administrative member’s only area of the website.

To do this, first sign into the member’s area and then click on the Search link located in the left side navigation bar.

When the page opens, you’ll see the search criteria fields along the top, and the properties listed below. All current listings now showing, but we are going to want to narrow that down.

If you are looking for a specific property or area, you can use the first field, but for most searches you’ll be selecting a property type, price range and region.

You’ll also want to click on whether you want to search for currently listed properties, pending sales, solds or expired listings.

Let’s do a current inventory search first.

We’ll look for condos, priced between 400 and 750,000. And we’ll select all areas to start with, so we get all properties wherever they may be located in and around Vallarta. Then click on the large search button. All the condos in this price range will be listed below, which is quite a few. Let’s reduce it by limiting our search to the Vallarta North region, which includes the Hotel Zone and Marina Vallarta, and try again. We can reduce the number further by selecting the number of bedrooms we are looking for.

The search results are listed in a condense list format, but if you click on this icon you can see the same list but with photos included.

Now, what if you wanted to search for properties that have been sold?

To give us a clean search, we’ll click on the “Reset all Filters” link located below the search button to clear all the fields we may have selected. We’ll then select condos again, in Vallarta North, priced between 500 and a million, and then we’ll deselect Current and select Sold. Now, in advanced search, and this is important, we’ll want to limit the date range of our search. There’s sold data going back 20 years, which is probably not want you want. Going back a year is most common so we’ll select that. Then click on Search.

If we want to limit the search to just Marina Vallarta, we can go back and select it and search again.

If we wanted only beachfront properties with an elevator, we could select that – there’s lots of options. Play with it for awhile to learn all it can do.

And that’s about it. If you want to print the results just hit the print button.

Now, if you were doing this because you want to prepare a CMA for a client, you may want to use the Comps (CMA) function instead as it will produce a nice, professional looking report for you. Check out the CMA instructional video on how to do that.

Be/Deco

Proudly Mexican company with more that 15 years producing high quality decorative items. The decoration line is conformed by original designs of art pieces, unique and high-end.

We have six elements in our production: clay, glass, wood, iron or metal, fiberglass and oil. The purpose is to decorate any space for our domestic and foreign clients.

Puerto Vallarta Condo Stats for 2018

The most popular type of real estate in Puerto Vallarta continues to be the condominium, accounting for 75% of the sales in 2018, a percentage in line with previous years. The condominium makes a lot of sense for second-home buyers who are looking for something that is easy to secure, low in maintenance, and they can leave for long periods of time. The views they can provide, especially from tower projects, can be impressive.

We decided to take a closer look at condominiums with regards to the number of bedrooms they have, price and size. Rather than studying the whole market we narrowed it down to just the downtown, hotel zone and the south shore regions, combining the three together, which comprises about 50% of the market and is a good representation of the “middle” of the market.

Price

The pie chart below shows four categories for what the average sales prices were for condominiums. $100,000-$250,000 and $250,000-$500,000 are roughly the same size with about 40% of the all sales. Combined they make up 80% of the market, leaving little for those above $500,000 (12%) or below $100,000 (6%).

The average size of a condominium under $100,000 was 670 f2, 1020 f2 for a condominium between $100,000-$250,000, 1470 f2 for condominiums priced between $250,000-$500,000 and 2285 f2 for condos over $500,000.

Type

When considering the number of bedrooms for this region, the two-bedroom, the traditional favorite, makes up for half of all sales. Next would be the one-bedroom unit, with just 6% for studio units and 10% for unit with three or more bedrooms.

A studio unit’s average size was 620 f2 and average price was $130,000. For one-bedroom units it was 865 f2 and $185,000 respectively. For two-bedrooms 1465 f2 and $320,000 and for a three-bedroom the average size was 2670 f2 and average price was $565,000.

Size

When we consider the size of the units we find that just over a third of all units sold were under 1,000 f2. Another third were between 1,000-1,500 f2, leaving remaining third for units over 1,500 f2.

Condos from under 1000 f2 up to 2000 f2 averaged about the same price with regards to cost per square foot or meter: $225 f2 ($2,400 m2). Condominiums over 2000 f2 in size averaged $190 f2 ($2,045 m2).

Conclusions

The most popular condo is a two-bedroom unit that accounts for 50% of all condos sold in 2018. Over 88% of condo sales were for units priced under $500,000, with only 12% for condos sold above that. And 2/3rds of all condos sold last year were under 1,500 f2 in size, half of those were under 1,000 f2.

Puerto Vallarta 2018 Look-Back Real Estate Report

The Vallarta/Nayarit region had another record year for real estate sales, bettering 2017 by 30% with over $360 million in sales. Two-thirds of those sales were for condominiums with just under 30% for homes.

These numbers were provided by MLSVallarta and Jonathon Smart at Riviera Partners Realty, which he obtained from the MLS system of the local real estate association, (AMPI), and together provide a reasonable assessment of the local real estate market. “Reasonable” as it doesn’t include all sales – a few of real estate developments are not members of either service and therefore their sales are not included. And it seems the farther you get away from the center of Puerto Vallarta, further up the coast of Nayarit, the less sales are reported.

Punta Mita, for instance, had a great season with over $65 million in sales, but few of these were included in MLS numbers. If this region’s sales, and those of non-member developers were included, total sales would probably be somewhere in the $450-$500 million.

From what is reported, though, some interesting information can be extracted. One is that the average condominium sales price increased in 2018 by 3% to $282,00 from $275,000 in the previous year. Even more interesting, however, was that the average size of a sold condominium is getting smaller – in 2017 the average size was 1,520 f2 whereas in 2018 it was 1,415 f2 – shrinking by 8%.

Why are condominiums getting smaller?

This is currently a development, new-product driven market. It is also a market driven by a demand for less expensive units – people have less money or want to spend less on a second home. In 2007, at the top of the market, the average sales price for a condominium was $400,000 and the average size was over 2,000 f2. The average condominium sold today is nearly 30% smaller compared to ten years ago, and the average price is 30% less expensive. It seems the market is demanding cheaper product and the developers are delivering that by providing smaller units.

Further evidence that sales prices are lower is that 50% of the sales in 2018 were sold for under $250,000; nearly 90% were under $500,000, leaving just over 2% selling for over $1 million. That 2% includes both homes and condominiums.

If we consider sold information by price-per-square-foot, (or m2), however, we find that the average condominium sold for $180 f2 ($1,936 m2) in 2017, but $200 f2 ($2,152 m2) in 2018. Meaning condominiums today may seem less expensive compared to what they were in 2017, but you actually are getting less real estate for your dollar. In fact, real estate prices for condos have actually gone up 10% over the past year.

There are properties selling for over $1 million but they tend to be limited to the Punta de Mita region at the northern point of the bay in Nayarit. Nearly all the sales that took place there in 2018 were for over one million, with one property going for as high as $7 million.

Most popular regions

The most popular region, in terms of number of sales was once again Emiliano Zapata, (or also known as the Romantic Zone), in Central Vallarta, responsible for nearly 25% of sales reported in 2018, (except for those in Punta Mita). The next most popular was the Hotel Zone (20%), followed by Nuevo Vallarta and the South Shore tied at 11% each.

In short, Puerto Vallarta has become a market for very reasonably priced real estate with the number of sales taking place increasing every year over the past ten years. And it continues to be driven by developers who are building smaller units to remain competitive, primarily in the south side of downtown Vallarta. There’s development taking all around the shores of Banderas Bay, but downtown Vallarta remains the favorite, with other areas, such as Marina Vallarta and Bucerias, recently seeing a large increase in new development taking place.